N-CSRS 1 a15-14244_2ncsrs.htm N-CSRS

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number

811-01829

 

Columbia Acorn Trust

(Exact name of registrant as specified in charter)

 

227 W. Monroe Street

Suite 3000

Chicago, IL

 

60606

(Address of principal executive offices)

 

(Zip code)

 

Paul B. Goucher, Esq.

Columbia Management Investment Advisers, LLC

100 Park Avenue

New York, New York 10017

 

P. Zachary Egan

Columbia Acorn Trust

227 West Monroe Street, Suite 3000

Chicago, Illinois 60606

 

Mary C. Moynihan

Perkins Coie LLP

700 13th Street, NW

Suite 600

Washington, DC 20005

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(312) 634-9200

 

 

Date of fiscal year end:

December 31

 

 

Date of reporting period:

June 30, 2015

 

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 



 

Item 1. Reports to Stockholders.

 



SEMIANNUAL REPORT

June 30, 2015

COLUMBIA ACORN FAMILY OF FUNDS

Class A, B, C, I, R, R4, R5, Y and Z Shares
Managed by Columbia Wanger Asset Management, LLC

Columbia Acorn® Fund

Columbia Acorn International®

Columbia Acorn USA®

Columbia Acorn International SelectSM

Columbia Acorn SelectSM

Columbia Thermostat FundSM

Columbia Acorn Emerging Markets FundSM

Columbia Acorn European FundSM



COLUMBIA ACORN FAMILY OF FUNDS

NET ASSET VALUE PER SHARE as of 6/30/15

    Columbia
Acorn® Fund
  Columbia
Acorn
International®
  Columbia
Acorn
USA®
  Columbia
Acorn
International
SelectSM
  Columbia
Acorn
SelectSM
  Columbia
Thermostat
FundSM
  Columbia
Acorn
Emerging
Markets
FundSM
  Columbia
Acorn
European
FundSM
 

Class A

 

$

30.63

   

$

43.41

   

$

30.38

   

$

22.76

   

$

20.52

   

$

14.72

   

$

12.34

   

$

15.23

   

Class B

 

$

26.51

   

$

41.87

   

$

26.07

   

$

21.37

   

$

17.26

   

$

14.79

     

N/A

     

N/A

   

Class C

 

$

25.87

   

$

41.69

   

$

25.84

   

$

21.23

   

$

16.91

   

$

14.77

   

$

12.23

   

$

15.05

   

Class I

 

$

32.53

   

$

43.57

   

$

32.65

   

$

23.06

   

$

22.00

     

N/A

   

$

12.39

   

$

15.24

   

Class R

   

N/A

   

$

43.32

     

N/A

     

N/A

     

N/A

     

N/A

     

N/A

     

N/A

   

Class R4

 

$

33.02

   

$

43.80

   

$

33.17

   

$

23.22

   

$

22.37

   

$

14.62

   

$

12.46

   

$

15.31

   

Class R5

 

$

33.07

   

$

43.50

   

$

33.20

   

$

23.21

   

$

22.41

   

$

14.63

   

$

12.45

   

$

15.39

   

Class Y

 

$

33.15

   

$

43.85

   

$

33.30

   

$

23.20

   

$

22.50

   

$

14.62

   

$

12.35

     

N/A

   

Class Z

 

$

32.44

   

$

43.52

   

$

32.45

   

$

23.07

   

$

21.87

   

$

14.55

   

$

12.38

   

$

15.25

   

                

Class I shares are available only to the Columbia funds, such as Columbia Thermostat Fund, and are not available to individual investors. Class R, R4, R5, Y and Z shares are sold at net asset value and have limited eligibility. Please see the Funds' prospectuses for details. The Columbia Acorn Family of Funds offer multiple share classes, not all necessarily available through all financial intermediaries, and the ratings assigned to the various share classes by mutual fund rating agencies may vary. Contact us for details.

2015 YEAR-END CAPITAL GAIN DISTRIBUTION ESTIMATE as of 7/31/151

To assist shareholders in year-end planning, we are providing capital gain distribution estimates for the Funds. The estimates below reflect undistributed net realized capital gains through July 31, 2015 and may not include all required tax adjustments. Distributions are not the result of material changes in investment strategy. The Funds have sold investments in order to satisfy shareholder redemptions, which has triggered the realization of capital gains. The Funds continue to have material unrealized gains in certain of their holdings. Please note that these figures are subject to change as required capital gain distributions, including appropriate tax adjustments, are determined as of October 31, 2015. In addition, further sales of Fund investments through October 31 and changes in outstanding Fund shares through the record date will affect the final per share distributions. Distributions will not be considered final until their declaration on the ex-dividend date for the capital gain distribution.

Fund Name   Expected
Record
Date and
Payable Date
  Range of Estimated
Total Capital Gain
Distribution2
  Class A
Share NAV
at 7/31
  Range of Total
Capital Gain
Distribution as %
of 7/31
Class A NAV
 

Columbia Acorn Fund

 

December 2015

 

$

8.00

to $9.00

 

$

30.36

     

26.35

% to 29.64%

 

Columbia Acorn International

 

December 2015

 

$

2.60

to $2.85

 

$

42.63

     

6.10

% to 6.69%

 

Columbia Acorn USA

 

December 2015

 

$

5.50

to $6.50

 

$

30.06

     

18.30

% to 21.62%

 

Columbia Acorn International Select

 

December 2015

   

None

   

$

22.19

     

   

Columbia Acorn Select

 

December 2015

 

$

4.00

to $4.75

 

$

20.28

     

19.72

% to 23.42%

 

Columbia Acorn Thermostat Fund

 

December 2015

 

$

0.05

to $0.10

 

$

14.77

     

0.34

% to 0.68%

 

Columbia Acorn Emerging Markets Fund

 

December 2015

   

None

   

$

11.72

     

   

Columbia Acorn European Fund

 

December 2015

   

None

   

$

15.27

     

   

        

1  None of Columbia Wanger Asset Management, the Columbia Acorn Funds or Columbia Threadneedle Investments provide tax or legal advice. Please consult a tax advisor or tax attorney for specific tax or legal advice.

2  Estimated amounts shown include only long-term capital gains for all Columbia Acorn Funds, except Columbia Acorn Select, for which the estimated total range shown includes between $0.70 and $0.95 of short-term capital gains.

The views expressed in the report commentaries reflect the current views of the respective authors. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective authors disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for a Columbia Acorn Fund are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any particular Columbia Acorn Fund. References to a specific company's securities should not be construed as a recommendation or investment advice and there can be no assurance that as of the date of publication of this report, the securities mentioned in each Fund's portfolio are still held or that the securities sold have not been repurchased.

Acorn®, Acorn USA® and Acorn International® are service marks owned and registered by Columbia Acorn Trust.




COLUMBIA ACORN FAMILY OF FUNDS

TABLE OF CONTENTS

Share Class Performance

   

2

   

Fund Performance vs. Benchmarks

   

3

   

Columbia Acorn® Fund

 

In a Nutshell

   

4

   

At a Glance

   

5

   

Major Portfolio Changes

   

28

   

Statement of Investments

   

31

   

Columbia Acorn International®

 

In a Nutshell

   

6

   

At a Glance

   

7

   

Major Portfolio Changes

   

39

   

Statement of Investments

   

41

   

Portfolio Diversification

   

49

   

Columbia Acorn USA®

 

In a Nutshell

   

8

   

At a Glance

   

9

   

Major Portfolio Changes

   

50

   

Statement of Investments

   

51

   

Columbia Acorn International SelectSM

 

In a Nutshell

   

10

   

At a Glance

   

11

   

Major Portfolio Changes

   

56

   

Statement of Investments

   

57

   

Portfolio Diversification

   

61

   

Columbia Acorn SelectSM

 

In a Nutshell

   

12

   

At a Glance

   

13

   

Major Portfolio Changes

   

62

   

Statement of Investments

   

63

   

Columbia Thermostat FundSM

 

In a Nutshell

   

14

   

At a Glance

   

15

   

Statement of Investments

   

67

   

Columbia Acorn Emerging Markets FundSM

 

In a Nutshell

   

16

   

At a Glance

   

17

   

Major Portfolio Changes

   

69

   

Statement of Investments

   

71

   

Portfolio Diversification

   

76

   

Columbia Acorn European FundSM

 

In a Nutshell

   

18

   

At a Glance

   

19

   

Major Portfolio Changes

   

77

   

Statement of Investments

   

79

   

Portfolio Diversification

   

83

   

Squirrel Chatter: Battery Technology and its Implications

   

20

   

Mid-Year Distributions

   

23

   

Understanding Your Expenses

   

25

   

Columbia Acorn Family of FundsSM

 

Statements of Assets and Liabilities

   

84

   

Statements of Operations

   

86

   

Statements of Changes in Net Assets

   

88

   

Financial Highlights

   

94

   

Notes to Financial Statements

   

110

   

Board of Approval of the Advisory Agreement

   

120

   

Results of Special Meeting of Shareholders

   

125

   

Description of Indexes

   

126

   

Expense Information

   

127

   

A COMMENT ON TRADING VOLUMES

Market conditions are always changing and vary by country and industry sector, and investing in international markets involves unique risks. In the wake of the 2007-2009 financial crisis, trading volumes in both emerging and developed international markets declined significantly and have stayed at generally reduced levels since then. Although it is difficult to accurately assess trends in trading volumes in foreign markets, because some amount of activity has migrated to alternative trading venues, a reduction in trading volumes poses challenges to the Funds. This is particularly so because the Funds focus on small- and mid-cap companies that usually have lower trading volumes and often take sizeable positions in portfolio companies. As a result of lower trading volumes, it may take longer to buy or sell securities, which can exacerbate a Fund's exposure to volatile markets. A Fund may also be limited in its ability to execute favorable trades in portfolio securities in response to changes in company prices and fundamentals. If a Fund is forced to sell securities to meet redemption requests or other cash needs, or in the case of an event affecting liquidity in a particular market or markets, it may be forced to dispose of those securities under disadvantageous circumstances and at a loss. As a Fund grows in size, these considerations take on increasing significance and may adversely impact performance.


1



COLUMBIA ACORN FAMILY OF FUNDS

SHARE CLASS PERFORMANCE Average Annual Total Returns through 6/30/15

  Class A  

Class B

 

Class C

 

Class I

 

Class R

 

Class R4

 

Class R5

 

Class Y

  Class Z  

  Without
Sales
Charge
  With
Sales
Charge
  Without
Sales
Charge
  With
Sales
Charge
  Without
Sales
Charge
  With
Sales
Charge
                     

 

Columbia Acorn® Fund

 

Year to date*

   

6.45

%

   

0.32

%

   

6.04

%

   

1.04

%

   

6.07

%

   

5.07

%

   

6.63

%

   

N/A

     

6.56

%

   

6.58

%

   

6.63

%

   

6.61

%

 
1 year    

4.45

%

   

-1.56

%

   

3.64

%

   

-0.48

%

   

3.69

%

   

2.87

%

   

4.81

%

   

N/A

     

4.68

%

   

4.76

%

   

4.81

%

   

4.73

%

 
5 years    

15.21

%

   

13.85

%

   

14.51

%

   

14.28

%

   

14.37

%

   

14.37

%

   

15.62

%

   

N/A

     

15.52

%

   

15.57

%

   

15.60

%

   

15.55

%

 
10 years    

8.48

%

   

7.83

%

   

7.80

%

   

7.80

%

   

7.65

%

   

7.65

%

   

8.82

%

   

N/A

     

8.78

%

   

8.80

%

   

8.81

%

   

8.79

%

 

Columbia Acorn International®

 

Year to date*

   

5.05

%

   

-0.99

%

   

4.61

%

   

-0.39

%

   

4.63

%

   

3.63

%

   

5.23

%

   

4.86

%

   

5.12

%

   

5.19

%

   

5.24

%

   

5.18

%

 
1 year    

-5.29

%

   

-10.74

%

   

-6.04

%

   

-10.48

%

   

-6.00

%

   

-6.89

%

   

-4.92

%

   

-5.65

%

   

-5.12

%

   

-4.99

%

   

-4.92

%

   

-5.02

%

 
5 years    

10.21

%

   

8.91

%

   

9.43

%

   

9.15

%

   

9.39

%

   

9.39

%

   

10.65

%

   

9.85

%

   

10.52

%

   

10.59

%

   

10.61

%

   

10.57

%

 
10 years    

8.82

%

   

8.18

%

   

8.09

%

   

8.09

%

   

7.99

%

   

7.99

%

   

9.22

%

   

8.49

%

   

9.16

%

   

9.19

%

   

9.21

%

   

9.19

%

 

Columbia Acorn USA®

 

Year to date*

   

7.14

%

   

0.97

%

   

6.45

%

   

1.45

%

   

6.76

%

   

5.76

%

   

7.34

%

   

N/A

     

7.26

%

   

7.32

%

   

7.33

%

   

7.25

%

 
1 year    

7.96

%

   

1.74

%

   

6.72

%

   

2.50

%

   

7.22

%

   

6.38

%

   

8.39

%

   

N/A

     

8.19

%

   

8.28

%

   

8.36

%

   

8.21

%

 
5 years    

16.67

%

   

15.30

%

   

15.78

%

   

15.56

%

   

15.84

%

   

15.84

%

   

17.13

%

   

N/A

     

17.00

%

   

17.03

%

   

17.07

%

   

16.98

%

 
10 years    

7.50

%

   

6.87

%

   

6.74

%

   

6.74

%

   

6.70

%

   

6.70

%

   

7.87

%

   

N/A

     

7.81

%

   

7.82

%

   

7.84

%

   

7.80

%

 

Columbia Acorn International SelectSM

 

Year to date*

   

3.70

%

   

-2.24

%

   

3.36

%

   

-1.64

%

   

3.36

%

   

2.36

%

   

3.88

%

   

N/A

     

3.86

%

   

3.90

%

   

3.91

%

   

3.88

%

 
1 year    

-12.04

%

   

-17.09

%

   

-12.67

%

   

-16.52

%

   

-12.70

%

   

-13.47

%

   

-11.75

%

   

N/A

     

-11.80

%

   

-11.74

%

   

-11.71

%

   

-11.76

%

 
5 years    

8.86

%

   

7.58

%

   

8.14

%

   

7.85

%

   

8.02

%

   

8.02

%

   

9.27

%

   

N/A

     

9.19

%

   

9.23

%

   

9.25

%

   

9.21

%

 
10 years    

7.76

%

   

7.12

%

   

7.06

%

   

7.06

%

   

6.92

%

   

6.92

%

   

8.14

%

   

N/A

     

8.10

%

   

8.12

%

   

8.13

%

   

8.11

%

 

Columbia Acorn SelectSM

 

Year to date*

   

5.96

%

   

-0.12

%

   

5.50

%

   

0.72

%

   

5.55

%

   

4.60

%

   

6.19

%

   

N/A

     

6.08

%

   

6.12

%

   

6.14

%

   

6.07

%

 
1 year    

6.96

%

   

0.80

%

   

6.05

%

   

2.06

%

   

6.15

%

   

5.36

%

   

7.35

%

   

N/A

     

7.19

%

   

7.31

%

   

7.33

%

   

7.25

%

 
5 years    

12.69

%

   

11.36

%

   

11.91

%

   

11.69

%

   

11.84

%

   

11.84

%

   

13.12

%

   

N/A

     

12.98

%

   

13.03

%

   

13.06

%

   

13.01

%

 
10 years    

7.67

%

   

7.04

%

   

6.95

%

   

6.95

%

   

6.84

%

   

6.84

%

   

8.04

%

   

N/A

     

7.97

%

   

7.99

%

   

8.01

%

   

7.98

%

 

Columbia Thermostat FundSM

 

Year to date*

   

1.08

%

   

-4.75

%

   

0.81

%

   

-4.13

%

   

0.74

%

   

-0.25

%

   

N/A

     

N/A

     

1.23

%

   

1.23

%

   

1.23

%

   

1.23

%

 
1 year    

2.46

%

   

-3.43

%

   

1.94

%

   

-2.94

%

   

1.70

%

   

0.72

%

   

N/A

     

N/A

     

2.74

%

   

2.68

%

   

2.74

%

   

2.69

%

 
5 years    

10.51

%

   

9.22

%

   

9.94

%

   

9.67

%

   

9.67

%

   

9.67

%

   

N/A

     

N/A

     

10.78

%

   

10.79

%

   

10.82

%

   

10.78

%

 
10 years    

6.26

%

   

5.63

%

   

5.72

%

   

5.72

%

   

5.47

%

   

5.47

%

   

N/A

     

N/A

     

6.53

%

   

6.53

%

   

6.55

%

   

6.53

%

 

Columbia Acorn Emerging Markets FundSM

 

Year to date*

   

-2.99

%

   

-8.59

%

   

N/A

     

N/A

     

-3.32

%

   

-4.29

%

   

-2.82

%

   

N/A

     

-2.88

%

   

-2.89

%

   

-2.83

%

   

-2.83

%

 
1 year    

-10.09

%

   

-15.25

%

   

N/A

     

N/A

     

-10.73

%

   

-11.62

%

   

-9.80

%

   

N/A

     

-9.87

%

   

-9.85

%

   

-9.77

%

   

-9.85

%

 

Life of Fund

   

6.10

%

   

4.49

%

   

N/A

     

N/A

     

5.34

%

   

5.34

%

   

6.50

%

   

N/A

     

6.45

%

   

6.46

%

   

6.48

%

   

6.40

%

 

Columbia Acorn European FundSM

 

Year to date*

   

6.66

%

   

0.56

%

   

N/A

     

N/A

     

6.29

%

   

5.29

%

   

6.80

%

   

N/A

     

6.77

%

   

6.81

%

   

N/A

     

6.80

%

 
1 year    

-3.84

%

   

-9.35

%

   

N/A

     

N/A

     

-4.57

%

   

-5.52

%

   

-3.54

%

   

N/A

     

-3.57

%

   

-3.57

%

   

N/A

     

-3.58

%

 

Life of Fund

   

12.32

%

   

10.61

%

   

N/A

     

N/A

     

11.50

%

   

11.50

%

   

12.64

%

   

N/A

     

12.62

%

   

12.61

%

   

N/A

     

12.61

%

 

*Not annualized.

Returns for Class A shares are shown with and without the maximum initial sales charge of 5.75%. Returns for Class B shares are shown with and without the applicable contingent deferred sales charge (CDSC) of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter. Returns for Class C shares are shown with and without the maximum CDSC of 1.00% for the first year after purchase. The Funds' other classes are not subject to sales charges and have limited eligibility. Please see the Funds' prospectuses for details. Performance for different share classes will vary based on differences in sales charges and certain fees associated with each class.

All results shown assume reinvestment of distributions during the period. Returns do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the redemption of Fund shares. Performance results may reflect the effect of any fee waivers or reimbursements of Fund expenses by the investment manager and/or any of its affiliates. Absent these fee waivers and/or expense reimbursement arrangements, performance results may have been lower. Please see Page 127 of this report for information on contractual fee waiver and expense reimbursement agreements in place on June 30, 2015, for Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund and voluntary fee waiver and expense reimbursement arrangements in place for Columbia Acorn International, Columbia Acorn International Select and Columbia Acorn Select.

The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting columbiathreadneedle.com/us or calling 800.922.6769.

The returns shown include the returns of each Fund's Class Z shares, each Fund's oldest share class, in cases where the inception date of the Fund is earlier than the inception date of the particular share class or where a period shown dates to before the inception date of the share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Continued on Page 3.


2



FUND PERFORMANCE VS. BENCHMARKS Class Z Average Annual Total Returns through 6/30/15

Class Z Shares   2nd
quarter*
  Year to
date*
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Columbia Acorn® Fund (ACRNX) (6/10/70)    

2.54

%

   

6.61

%

   

4.73

%

   

15.55

%

   

8.79

%

   

14.58

%

 

Russell 2500 Index

   

-0.34

%

   

4.81

%

   

5.92

%

   

17.85

%

   

9.09

%

   

N/A

   

S&P 500 Index**

   

0.28

%

   

1.23

%

   

7.42

%

   

17.34

%

   

7.89

%

   

10.96

%

 

Russell 2000 Index

   

0.42

%

   

4.75

%

   

6.49

%

   

17.08

%

   

8.40

%

   

N/A

   

Lipper Mid-Cap Growth Funds Index

   

0.44

%

   

5.54

%

   

9.19

%

   

16.74

%

   

9.57

%

   

N/A

   
Columbia Acorn International® (ACINX) (9/23/92)    

0.81

%

   

5.18

%

   

-5.02

%

   

10.57

%

   

9.19

%

   

10.87

%

 

S&P Global Ex-U.S. Between $500M and $5B Index

   

2.91

%

   

7.97

%

   

-1.52

%

   

9.91

%

   

8.20

%

   

8.48

%

 

S&P Global Ex-U.S. SmallCap Index

   

4.55

%

   

8.42

%

   

-2.26

%

   

10.54

%

   

7.84

%

   

7.97

%

 

MSCI EAFE Index (Net)

   

0.62

%

   

5.52

%

   

-4.22

%

   

9.54

%

   

5.12

%

   

6.09

%

 

Lipper International Small/Mid Growth Funds Index

   

4.35

%

   

10.16

%

   

-0.41

%

   

13.26

%

   

8.91

%

   

N/A

   
Columbia Acorn USA® (AUSAX) (9/4/96)    

2.02

%

   

7.25

%

   

8.21

%

   

16.98

%

   

7.80

%

   

10.93

%

 

Russell 2000 Index

   

0.42

%

   

4.75

%

   

6.49

%

   

17.08

%

   

8.40

%

   

8.72

%

 

Lipper Small-Cap Growth Funds Index

   

1.71

%

   

7.54

%

   

9.63

%

   

17.43

%

   

8.29

%

   

7.44

%

 
Columbia Acorn Int'l SelectSM (ACFFX) (11/23/98)    

2.37

%

   

3.88

%

   

-11.76

%

   

9.21

%

   

8.11

%

   

8.77

%

 

S&P Developed Ex-U.S. Between $2B and $10B Index

   

2.27

%

   

8.00

%

   

-1.35

%

   

10.68

%

   

6.99

%

   

7.68

%

 

MSCI EAFE Index (Net)

   

0.62

%

   

5.52

%

   

-4.22

%

   

9.54

%

   

5.12

%

   

4.37

%

 

Lipper International Small/Mid Growth Funds Index

   

4.35

%

   

10.16

%

   

-0.41

%

   

13.26

%

   

8.91

%

   

10.35

%

 
Columbia Acorn SelectSM (ACTWX) (11/23/98)    

3.16

%

   

6.07

%

   

7.25

%

   

13.01

%

   

7.98

%

   

10.35

%

 

S&P MidCap 400 Index

   

-1.06

%

   

4.20

%

   

6.40

%

   

17.82

%

   

9.74

%

   

10.55

%

 

S&P 500 Index**

   

0.28

%

   

1.23

%

   

7.42

%

   

17.34

%

   

7.89

%

   

5.46

%

 

Lipper Mid-Cap Core Funds Index

   

-0.57

%

   

3.43

%

   

5.21

%

   

16.45

%

   

8.67

%

   

9.14

%

 
Columbia Thermostat FundSM (COTZX) (9/25/02)    

-0.26

%

   

1.23

%

   

2.69

%

   

10.78

%

   

6.53

%

   

7.77

%

 

S&P 500 Index

   

0.28

%

   

1.23

%

   

7.42

%

   

17.34

%

   

7.89

%

   

9.72

%

 

Barclays U.S. Aggregate Bond Index

   

-1.68

%

   

-0.10

%

   

1.86

%

   

3.35

%

   

4.44

%

   

4.48

%

 

Lipper Flexible Portfolio Funds Index

   

-0.46

%

   

1.01

%

   

-0.59

%

   

9.87

%

   

6.26

%

   

7.79

%

 

50/50 Blended Benchmark

   

-0.70

%

   

0.66

%

   

4.73

%

   

10.36

%

   

6.46

%

   

7.35

%

 
Columbia Acorn Emerging Markets FundSM (CEFZX) (8/19/11)    

-2.06

%

   

-2.83

%

   

-9.85

%

   

     

     

6.40

%

 

S&P Emerging Markets Between $500M and $5B Index

   

1.17

%

   

3.05

%

   

-2.71

%

   

     

     

3.68

%

 

MSCI Emerging Markets Small Cap Index (Net)

   

4.50

%

   

8.25

%

   

0.34

%

   

     

     

3.10

%

 

Lipper Emerging Markets Index

   

0.66

%

   

1.72

%

   

-7.05

%

   

     

     

2.35

%

 
Columbia Acorn European FundSM (CAEZX) (8/19/11)    

2.30

%

   

6.80

%

   

-3.58

%

   

     

     

12.61

%

 

S&P Europe Between $500M and $5B Index

   

5.03

%

   

10.62

%

   

-1.86

%

   

     

     

14.88

%

 

Euromoney Smaller European Companies (inc. UK) Index

   

5.49

%

   

10.15

%

   

-5.39

%

   

     

     

12.92

%

 

Lipper European Region Index

   

1.89

%

   

6.42

%

   

-4.28

%

   

     

     

12.26

%

 

The inception dates for Class A, B and C shares (if offered) are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 10/16/00; Columbia Thermostat Fund, 3/3/03; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception dates for Class I shares are as follows: Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select, 9/27/10; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11. The inception date for Class R shares for Columbia Acorn International is 8/2/11. The inception date for Class R4, R5 and Y shares (if offered) is as follows: Columbia Acorn Fund, Columbia Acorn USA, Columbia Acorn International Select, Columbia Acorn Select, Columbia Thermostat Fund, Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 11/8/12, except that Class Y shares of Columbia Acorn Emerging Markets Fund commenced operations on 6/13/13 and Class R4 shares of Columbia Acorn European Fund commenced operations on 6/25/14. The inception date for Class R5 shares of Columbia Acorn International is 8/2/11. The inception date for Class R4 and Y shares of Columbia Acorn International is 11/8/12. The inception date for Class Z shares is as follows: Columbia Acorn Fund, 6/10/70; Columbia Acorn International, 9/23/92; Columbia Acorn USA, 9/4/96; Columbia Acorn International Select and Columbia Acorn Select, 11/23/98; Columbia Thermostat Fund, 9/25/02; Columbia Acorn Emerging Markets Fund and Columbia Acorn European Fund, 8/19/11.

*Not annualized.

**Although the Fund typically invests in small- and mid-sized companies, the comparison to the S&P 500® Index is presented to show performance against a widely recognized market index over the life of the Fund.

Please see Page 126 for a description of the indexes listed above.


3




COLUMBIA ACORN® FUND

IN A NUTSHELL

 

 
Robert A. Mohn*
Co-Portfolio Manager
  P. Zachary Egan
Co-Portfolio Manager
 

 

 
Fritz Kaegi
Co-Portfolio Manager
  David L. Frank
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn Fund Class Z shares gained 2.54% in the second quarter of 2015, outperforming the Fund's primary benchmark, the Russell 2500 Index, which declined by 0.34% during the period. For the six months ended June 30, the Fund rose by 6.61%, topping the 4.81% gain by the Russell 2500 Index. Good stock selection in the health care sector, and specifically in biotech-related names, represented about two-thirds of the outperformance during the second quarter. Most of the remaining outperformance relative to the benchmark resulted from good stock selection in the financials sector.

Within health care, the "orphan drug" investment theme came to fruition with Alexion's takeover of Synageva BioPharma at a 128% premium to pre-announcement trading levels. Returning 109% during the quarter and 119% for the first half of the year, Synageva was at the core of the investment theme begun in 2007 to invest in companies developing drugs to treat "orphan" diseases—serious ailments that affect small numbers of people—which benefit from a favorable regulatory approval process. Orphan drug developers Ultragenyx Pharmaceutical (up 65% for the quarter) and Sarepta Therapeutics (up 129%), as well as biotech Seattle Genetics (up 37%), all rose on the Synageva take-out offer and accounted for most of the rest of the Fund's outperformance in health care. For the year-to-date period, these stocks had gains of 135%, 110% and 51%, respectively. We believe the results achieved within our orphan drug theme offer a good example of how our research structure and investment process can deliver unique value for Fund investors over the long term.

Within financials, investment manager SEI Investments led the outperformance, gaining 12% in the second quarter and 23% year to date. The company's actively managed investment strategies continued to attract strong net cash inflows. The Fund also benefited from a takeover offer for HCC Insurance, which rose 36% and was sold during the quarter.

Fund industrial stocks fell 1.6% in the second quarter, outperforming a 2.5% decline for the industrial sector within the benchmark. However, the Fund's overweight position resulted in a larger negative impact versus the benchmark's much smaller weighting in the sector. Notable detractors for the Fund included satellite owner Globalstar, down 37% for the quarter and 23% for the half year on regulatory worries about the company's wireless spectrum. Avis Budget Group fell 25% in the quarter and 33% for the half year on investor worries about pricing conditions in the car rental industry. Portable power generator maker Generac declined 18% for the quarter and 15% for the half year following management's lowered 2015 earnings guidance.

Columbia Acorn Fund continued to have significant net redemptions during the first half of 2015, following significant net redemptions during 2014. These redemptions have caused the Fund to realize large amounts of long-term capital gain, as many of the positions liquidated in connection with the redemptions had

appreciated considerably in value during the periods they were held by the Fund. The Fund seeks to minimize the amount of gains distributions affecting its taxable shareholders, consistent with the execution of its investment strategy and the trading activity required by Fund flows. Similarly, CWAM's experienced trading desk makes every effort to minimize the impact of this trading on the prices of Fund portfolio holdings.

Over the past 12 months, and against the backdrop of these Fund net redemptions, we have reduced meaningfully the number of positions owned by the Fund. At June 30, 2015, the Fund had 184 positions, compared to 205 at March 31, 2015, 277 at December 31, 2014, and 320 at June 30, 2014. Our 10 largest positions accounted for 18.5% of Fund assets at quarter end, up slightly from 18.3% at March 31. While past performance is not indicative of future results, the Fund has thrived at this level of concentration in the past. The Fund's holdings may become slightly more concentrated in the future as the result of having fewer overall holdings or more concentration in the largest holdings. Our investment team's key focus going forward is on adding new holdings when valuations are attractive and appropriately sizing the positions the Fund currently owns.

We were comfortable with the Fund's sector positioning versus its benchmark at quarter end. For the reasons described in our first quarter 2015 report, our largest overweight versus the benchmark remained the industrials sector, and our largest underweight remained the financials sector at the second quarter end. During the quarter, the Fund's industrials weight declined by a percentage point, while its financials underweight did not change. The majority of the financials underweight related to the REITs portion of the financials sector.

P. Zachary Egan and Fritz Kaegi joined the management team of Columbia Acorn Fund as co-portfolio managers on May 1, 2015. Mr. Egan has 16 years of industry experience and also serves as President and Chief International Investment Officer of Columbia Wanger, as well as co-portfolio manager of Columbia Acorn International. Mr. Kaegi brings 17 years of industry experience to the Fund and also serves as co-portfolio manager of Columbia Acorn Emerging Markets Fund.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

SEI Investments

   

2.7

%

 

Ultragenyx Pharmaceutical

   

1.5

   

Generac

   

0.9

   

Seattle Genetics

   

0.7

   

Avis Budget Group

   

0.7

   

Sarepta Therapeutics

   

0.6

   

Globalstar

   

0.6

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.

*  It is expected that Robert A. Mohn, co-portfolio manager of Columbia Acorn Fund, will step down from this role in the fourth quarter of 2015. Mr. Mohn will continue to perform portfolio management services for the Fund leading up to his departure to ensure a smooth transition in management.


4



COLUMBIA ACORN® FUND

AT A GLANCE

Total Net Assets of the Fund:
$11.8 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn® Fund Class Z Shares

June 10, 1970 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period. A $10,000 investment in Columbia Acorn Fund at inception appreciated to $31,777 on December 31, 1978, the inception date of the Russell 2500 Index. For comparison with the Russell 2500 Index, we assigned the index the same value as the Fund at index inception. Although the Fund typically invests in small- and mid-sized companies, the comparison to the S&P 500 Index is presented to show performance against a widely recognized market index over the life of the Fund.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (6/10/70 inception)    

2.54

%

   

6.61

%

   

4.73

%

   

15.55

%

   

8.79

%

   

14.58

%

 
Class A (10/16/00 inception)  

without sales charge

   

2.46

     

6.45

     

4.45

     

15.21

     

8.48

     

14.21

   

with sales charge

   

-3.43

     

0.32

     

-1.56

     

13.85

     

7.83

     

14.06

   

Russell 2500 Index*

   

-0.34

     

4.81

     

5.92

     

17.85

     

9.09

     

N/A

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.79% for Class Z shares and 1.08% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   SEI Investments
Mutual Fund Administration & Investment
Management
  2.7
%  
2.   Donaldson
Industrial Air Filtration
  2.4
%  
3.   Ametek
Aerospace/Industrial Instruments
  2.1
%  
4.   Cepheid
Molecular Diagnostics
  2.1
%  
5.   LKQ
Alternative Auto Parts Distribution
  1.7
%  
6.   Amphenol
Electronic Connectors
  1.7
%  
7.   Mettler-Toledo International
Laboratory Equipment
  1.5
%  
8.   Ultragenyx Pharmaceutical
Biotech Focused on "Ultra-Orphan" Drugs
  1.5
%  
9.   Nordson
Dispensing Systems for Adhesives & Coatings
  1.4
%  
10.   Associated Banc-Corp
Midwest Bank
  1.4
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


5



COLUMBIA ACORN INTERNATIONAL®

IN A NUTSHELL

 

 
P. Zachary Egan
Co-Portfolio Manager
  Louis J. Mendes
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Please also see "A Comment on Trading Volumes" on Page 1 of this report.

Columbia Acorn International Class Z shares gained 0.81% in the second quarter of 2015, bringing its year-to-date return to 5.18%. This was 2.79% behind the Fund's primary benchmark, the S&P Global ex-U.S. Between $500M and $5B® Index, which rose 7.97% year to date.

The majority of the Fund's underperformance for the half year was the result of weak relative performance in Asia, excluding Japan, which comprised roughly 27% of both the Fund and the benchmark. The strong rally in Chinese domestic shares (described in more detail below) helped lift China-related shares listed in Hong Kong in the benchmark nearly 25%, and the Fund's China-related holdings did not keep pace. In Hong Kong itself, Fund holdings continued to be negatively impacted by weak domestic demand in consumer stocks, as well as the continued decline in the Macau gaming sector. Elsewhere in Asia, underperformance in Korea was primarily due to the Fund's lack of holdings in the health care sector, which rallied over 100% on positive news regarding drug approvals. On the upside, in Japan, where the Fund's weight roughly matched that of the benchmark, good stock selection helped Fund stocks outperform the benchmark during the first half of 2015.

Although the principal Chinese stock exchanges in Shanghai and Shenzen are by regulation inaccessible to most non-Chinese investors, including the Fund, this so-called "A-share market" is the world's second largest equity market, calculated in U.S. dollars.* In the 12 months ended June 30, 2015, the Shanghai A and Shenzen A share indexes rose 109% and 125%, respectively, inclusive of a major correction in June. The rally has captured the imagination of millions of new domestic Chinese investors who have rushed to open brokerage accounts and speculate in the market. Margin lending reached record highs in June, representing an estimated 12% of the free-float market capitalization of marginable stocks, according to Reuters. The launch in November 2014 of the "Shanghai-Hong Kong Connect," a partnership between the Hong Kong and Shanghai exchanges that allows traders registered on each exchange to invest in stocks on the other, was thought to be the global investors' gateway into the China A-share market. In fact, it has resulted to date in large amounts of money flowing from Chinese investors into shares listed on the Hong Kong exchange, significantly bolstering that market.

Given this market environment, Columbia Acorn International's underweight in China-related shares has hurt relative performance, but we have been skeptical of the hype around the Shanghai-Hong Kong Connect and the rapid rise in speculation by Chinese investors, which we believe warrant caution for global investors like the Fund. We continue to be cautious about allocating capital in the region, although we have recently initiated some new positions there, as discussed below. The Chinese political leadership has been engaged for some time in a very public

project to transform its large economy from one that has been almost solely export-oriented and investment-led, into one more focused on its internal market and meeting the needs of the Chinese consumer and citizen. This re-orientation is necessitated by an economic growth imperative in light of industrial capacity overinvestment and increasing demands for an enhanced quality of life. In recent months, some elements of a policy framework designed to address these goals have become clearer, which we believe create some attractive opportunities for long-term investors like the Fund. In particular, we like the prospects for entrepreneurial Chinese companies focused on health care, certain types of infrastructure development, and meeting the goals of evolving environmental regulation.

Consistent with this view, we have recently increased the Fund's exposure to China, although it remains slightly underweight compared to the benchmark. We initiated positions in China Everbright International, a municipal waste-to-energy operating facility, and SIIC Environment, a municipal water treatment operator, both of which will benefit from efforts to clean up a highly polluted environment after years of heavy industrial growth. Another new position, Phoenix Healthcare Group, has been winning contracts to manage public hospitals, and through modern organizational and information systems, it is increasing health care delivery standards while turning around loss-making, former state-managed operations. At June 30, the Fund's exposure to China (through Hong Kong-listed, Singapore-listed and U.S.-listed shares) was approximately 6%, compared to 3% at December 31, 2014.

During the first half of 2015, there was significant world focus and dramatic headlines about the potential exit of Greece from the eurozone and the possible impact. While a Greek exit from the common euro currency cannot be ruled out, we think that it is an unlikely outcome and one that entails little contagion risk for the rest of Europe because of the way the debt is held. Whatever the outcome, we do not believe it would portend a broader dissolution of the eurozone. Consequently, we have not modified the Fund's portfolio to anticipate this scenario. We remain overweight in Europe relative to the benchmark by approximately three percentage points.

*Data source: the World Federation of Exchanges.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

China Everbright International

   

0.7

%

 

SIIC Environment

   

0.3

   

Phoenix Healthcare Group

   

0.3

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.


6



COLUMBIA ACORN INTERNATIONAL®

AT A GLANCE

Total Net Assets of the Fund:
$7.9 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn International® Class Z Shares

September 23, 1992 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (9/23/92 inception)    

0.81

%

   

5.18

%

   

-5.02

%

   

10.57

%

   

9.19

%

   

10.87

%

 
Class A (10/16/00 inception)  

without sales charge

   

0.74

     

5.05

     

-5.29

     

10.21

     

8.82

     

10.46

   

with sales charge

   

-5.05

     

-0.99

     

-10.74

     

8.91

     

8.18

     

10.17

   
S&P Global Ex-U.S.
Between $500M and $5B® Index*
   

2.91

     

7.97

     

-1.52

     

9.91

     

8.20

     

8.48

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.93% for Class Z shares and 1.26% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   Coronation Fund Managers (South Africa)
South African Fund Manager
  1.2
%  
2.   CCL Industries (Canada)
Global Label Converter
  1.0
%  
3.   Zee Entertainment Enterprises (India)
Indian Programmer of Pay Television Content
  1.0
%  
4.   Distribuidora Internacional
de Alimentación (Spain)
Discount Retailer in Spain & Latin America
  1.0
%  
5.   SimCorp (Denmark)
Software for Investment Managers
  1.0
%  
6.   Spotless (Australia)
Facility Management & Catering Company
  1.0
%  
7.   Spirax Sarco (United Kingdom)
Steam Systems for Manufacturing &
Process Industries
  0.8
%  
8.   President Chain Store (Taiwan)
Convenience Chain Store Operator in Taiwan
  0.8
%  
9.   Singapore Exchange (Singapore)
Singapore Equity & Derivatives Market Operator
  0.8
%  
10.   Partners Group (Switzerland)
Private Markets Asset Management
  0.8
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


7



COLUMBIA ACORN USA®

IN A NUTSHELL

 

 
Robert A. Mohn*
Co-Portfolio Manager
  William J. Doyle*
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn USA Class Z shares gained 2.02% in the second quarter of 2015, outperforming the Fund's primary benchmark, the Russell 2000 Index, which rose 0.42%. Year to date through June 30, the Fund was up 7.25%, well ahead of the 4.75% gain of its benchmark. Strong performance in the health care sector, particularly in biotech stocks, fueled the Fund's strong relative performance for both periods.

Four of the top five contributors to Fund performance in the second quarter were biotech names. Three of these four biotech winners develop drugs to fight orphan diseases—rare diseases that affect a small percentage of the population. Focusing on orphan drug companies has been one of the Fund's investment themes. Synageva BioPharma gained 109% in the quarter on news it was being acquired by Alexion Pharmaceuticals. For the half-year period, Synageva was up 120%. We sold the Fund's position in the stock during the quarter to capture its strong gains. Ultragenyx Pharmaceutical saw its stock rise on Synageva's announcement and on news of positive test results for an orphan drug in its pipeline. Ultragenyx gained 64% in the quarter and was up 137% for the half year. Sarepta Therapeutics, up 129% in the quarter and 110% for the half year, also bounced on the Synageva news and on a favorable review from the FDA of its drug to treat Duchenne muscular dystrophy. Our remaining biotech winner was Seattle Genetics, a developer of antibody-based therapies for cancer, which gained 37% in the quarter and ended the half year up 51%, as its stock benefited from strength in the sector.

Other winners in the quarter included Texas thrift LegacyTexas, which gained 34% as concerns over its energy loan book abated. Virtusa, a provider of offshore IT outsourcing services, rose 24% in the quarter on strong revenue growth fueled by demand from financial services clients.

Rental car companies Hertz and Avis Budget Group slumped in the quarter, falling 16% and 25%, respectively, as rental car pricing year over year grew less than Wall Street analysts believed it would. We are comfortable with the rate of pricing growth. With a 34% loss for Avis Budget Group and a 27% decline for Hertz, these stocks were the Fund's biggest detractors for the six-month period.

The Fund also experienced some declines in the industrial sector. Generac, a manufacturer of standby power generators, had weak year-over-year sales, as electrical power outages fell well below trend. Generac's stock dropped 18% in the quarter and was off 15% year to date. Oshkosh, a specialty truck manufacturer, was added to the Fund in the second quarter but got off to a bumpy start. Its 22% decline followed the company's release of weak

revenue guidance within its aerial work platform business segment. A provider of international container leases, CAI International fell 16% in the second quarter as sharp declines in steel prices have lowered the cost of buying ocean going container boxes, and lower box prices have translated into falling daily rental rates for CAI's fleet.

We are encouraged by Columbia Acorn USA's performance to date in 2015 and with the progress being made in the Fund's longer term results. For the one-year period ended June 30, 2015, Columbia Acorn USA's 8.21% gain was 1.72% ahead of its benchmark, and Fund results for the five- and 10-year periods were less than a percentage point off the benchmark. This quarter we also saw our orphan drug biotech theme come to fruition. Orphan pharmaceutical Synageva BioPharma, for example, was added to the Fund in the first quarter of 2012 and the position produced a cumulative gain within Columbia Acorn USA of 574% upon its sale in the second quarter. After the biotech group's multi-year run-up, we believe that the sector's valuations appear stretched. With the removal of Synageva BioPharma from the portfolio and some selective trimming of other positions, we have recently reduced the Fund's exposure to this area.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

Ultragenyx Pharmaceutical

   

1.5

%

 

Avis Budget Group

   

1.4

   

Sarepta Therapeutics

   

1.0

   

LegacyTexas

   

1.0

   

Virtusa

   

0.9

   

Generac

   

0.9

   

CAI International

   

0.8

   

Hertz

   

0.7

   

Seattle Genetics

   

0.7

   

Oshkosh

   

0.5

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.

*  It is expected that Robert A. Mohn, co-portfolio manager of Columbia Acorn USA, will step down in the fourth quarter of 2015. William J. Doyle, current co-portfolio manager of Columbia Acorn USA, will continue in that role. Mr. Mohn will continue to perform portfolio management services for the Fund leading up to his departure to ensure a smooth transition in management.


8



COLUMBIA ACORN USA®

AT A GLANCE

Total Net Assets of the Fund:
$1.3 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn USA® Class Z Shares

September 4, 1996 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (9/4/96 inception)    

2.02

%

   

7.25

%

   

8.21

%

   

16.98

%

   

7.80

%

   

10.93

%

 
Class A (10/16/00 inception)  

without sales charge

   

1.96

     

7.14

     

7.96

     

16.67

     

7.50

     

10.56

   

with sales charge

   

-3.91

     

0.97

     

1.74

     

15.30

     

6.87

     

10.21

   

Russell 2000 Index*

   

0.42

     

4.75

     

6.49

     

17.08

     

8.40

     

8.72

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.08% for Class Z shares and 1.34% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   Ametek
Aerospace/Industrial Instruments
  3.3
%  
2.   Nordson
Dispensing Systems for Adhesives & Coatings
  3.1
%  
3.   Mettler-Toledo International
Laboratory Equipment
  3.1
%  
4.   Extra Space Storage
Self Storage Facilities
  2.9
%  
5.   HEICO
FAA-approved Aircraft Replacement Parts
  2.8
%  
6.   Donaldson
Industrial Air Filtration
  2.6
%  
7.   IPG Photonics
Fiber Lasers
  2.5
%  
8.   Cepheid
Molecular Diagnostics
  2.1
%  
9.   Drew Industries
RV & Manufactured Home Components
  1.7
%  
10.   Ansys
Simulation Software for Engineers & Designers
  1.6
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


9



COLUMBIA ACORN INTERNATIONAL SELECTSM

IN A NUTSHELL

 

 
Christopher J. Olson
Co-Portfolio Manager
  Andreas Waldburg-Wolfegg
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector. Please also see "A Comment on Trading Volumes" on Page 1 of this report.

Columbia Acorn International Select Class Z shares ended the second quarter of 2015 up 2.37%, topping the 2.27% gain of the Fund's primary benchmark, the S&P Developed Ex-U.S. Between $2B and $10B® Index. For the six-month period ended June 30, the Fund was up 3.88% while the benchmark gained 8.00% for the same period. On a sector basis, Fund industrials outperformed relative to the benchmark for both periods, while materials and financials negatively impacted performance. On a regional basis, good stock selection in Asia, excluding Japan, was a positive during the quarter. Columbia Acorn International Select also outperformed in the UK and Ireland in the second quarter, though a lesser weighting than the benchmark diminished its impact relative to the index.

The top contributor to Fund performance in the second quarter and for the half year period was CJ Corp, a holding company of Korean consumer conglomerates. Up 66% in the quarter and 86% for the half, investors responded favorably to the company's new management and its successful implementation of restructuring programs. In the United Kingdom, WH Smith, a newsprint, book and stationery retailer, gained 24% in the second quarter, benefiting from strong air passenger demand in its travel division. WH Smith was added to the portfolio in the first quarter and, at the second quarter end, was up 15%. Silver and gold miner Tahoe Resources rebounded in the second quarter, gaining 11% after a weak first quarter left the stock looking inexpensive. Tahoe's strong quarter was not enough to overcome earlier weakness, however, leaving its stock with a 12% loss for the half year. CCL Industries, a global label converter based in Canada, gained 10% in the second quarter and was up 14% for the half year period on continued strong revenue growth.

In Japan, Japan Tobacco, a maker of cigarettes, had another strong quarter, gaining 14% as investor fears surrounding its Russian operations abated and management undertook a stock buyback. Japan Tobacco's stock was up 30% for the semiannual period. KDDI, a mobile and fixed line communication service provider in Japan, gained 7% in the quarter and was up 16% for the half year, as it has continued to deliver consistent earnings growth driven by higher average revenue per user and by subscriber growth.

The biggest detractor from gains in the quarter and half was Coronation Fund Managers, a South African fund manager. Down 15% in the quarter and 31% year to date, its stock suffered from significantly lower performance fees compared to those earned last year. Beadell Resources, a gold miner operating in Brazil, and Goldcorp, a Canadian

gold miner, were also among the detractors. Beadell fell 26% in the quarter and was off 18% for the half-year period, while Goldcorp declined 10% in the quarter and ended the half down 11%. Both were affected by weak gold prices. Park24, a parking lot operator in Japan, gained nearly 40% in the first quarter as investors migrated toward more stable domestic businesses, but the second quarter took away some of that gain, as its stock fell 17% on a weaker than expected recovery in parking lot demand. Park24 returned 16% year to date. Nippon Prologis REIT, a logistics REIT in Japan, was down 15% for the second quarter and the half year as investors rotated into other sectors after several years of outperformance.

Andreas Waldburg-Wolfegg was named co-portfolio manager of Columbia Acorn International Select, effective May 1, 2015. Mr. Waldburg-Wolfegg brings 22 years of industry experience to the portfolio and also serves as co-portfolio manager of Columbia Acorn European Fund.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

KDDI

   

3.9

%

 

Tahoe Resources

   

3.2

   

CJ Corp

   

3.1

   

CCL Industries

   

2.8

   

Japan Tobacco

   

2.5

   

WH Smith

   

2.5

   

Coronation Fund Managers

   

2.0

   

Goldcorp

   

1.9

   

Nippon Prologis REIT

   

1.3

   

Park24

   

1.0

   

Beadell Resources

   

0.8

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.


10



COLUMBIA ACORN INTERNATIONAL SELECTSM

AT A GLANCE

Total Net Assets of the Fund:
$223.4 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn International SelectSM Class Z Shares

November 23, 1998 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (11/23/98 inception)    

2.37

%

   

3.88

%

   

-11.76

%

   

9.21

%

   

8.11

%

   

8.77

%

 
Class A (10/16/00 inception)  

without sales charge

   

2.26

     

3.70

     

-12.04

     

8.86

     

7.76

     

8.41

   

with sales charge

   

-3.60

     

-2.24

     

-17.09

     

7.58

     

7.12

     

8.03

   
S&P Developed Ex-U.S.
Between $2B and $10B® Index*
   

2.27

     

8.00

     

-1.35

     

10.68

     

6.99

     

7.68

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.18% for Class Z shares and 1.47% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   Naspers (South Africa)
Media in Africa, China, Russia & other
Emerging Markets
  4.3
%  
2.   CapitaLand Mall Trust (Singapore)
Singapore Commercial Property Real Estate
Investment Trust
  4.2
%  
3.   Singapore Exchange (Singapore)
Singapore Equity & Derivatives Market Operator
  4.1
%  
4.   KDDI (Japan)
Mobile & Fixed Line Communication Service
Provider in Japan
  3.9
%  
5.   Recruit Holdings (Japan)
Recruitment & Media Services
  3.6
%  
6.   Secom (Japan)
Security Services
  3.5
%  
7.   Tahoe Resources (Guatemala)
Silver & Gold Projects in Guatemala & Peru
  3.2
%  
8.   CJ Corp (Korea)
Holding Company of Korean Consumer
Conglomerate
  3.1
%  
9.   Partners Group (Switzerland)
Private Markets Asset Management
  2.8
%  
10.   CCL Industries (Canada)
Global Label Converter
  2.8
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


11



COLUMBIA ACORN SELECTSM

IN A NUTSHELL

 

 
Robert A. Chalupnik
Lead Portfolio Manager
  Matthew S. Szafranski
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Foreign investments subject the Fund to risks, including political, economic, market, social and other risks, within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. The Fund may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the Fund more vulnerable to unfavorable developments in the sector.

Columbia Acorn Select Class Z shares ended the second quarter of 2015 up 3.16%, outperforming the 1.06% decline of its primary benchmark, the S&P MidCap 400 Index. For the six months ended June 30, the Fund was up 6.07% versus a 4.20% gain for the benchmark. Solid performance from Fund health care stocks, specifically biotech-related names, contributed to the Fund's outperformance for both periods. Being underweight in utilities also benefited the Fund, as this group was down nearly 7% for the quarter and 12% year to date in the benchmark. We have not held any utility stocks during the past year due to high valuations for these low-growth companies.

Synageva BioPharma, a biotech company focused on orphan diseases, surged 110% in the quarter after announcing that the company was being acquired by Alexion Pharmaceuticals. For the half year, the stock was up nearly 121%. We chose to sell this position on the positive news. Ultragenyx Pharmaceutical is also focused on drugs that treat very rare diseases. Its stock was up nearly 64%, as the sector bounced with Synageva. Ultragenyx also benefited from favorable news for several of its pipeline drugs. For the half year, Ultragenyx was up nearly 109%.

Other winners included LKQ, a distributor of alternative auto parts for the collision industry. Up 18% in the quarter and 7% for the half year, LKQ enjoyed sales growth across all of its business segments and also benefited from a rebound in margins after a tough fourth quarter. SEI Investments, a mutual fund administrator and investment manager, gained 12% in the quarter and 23% for the half year, as its actively managed investment strategies attracted strong cash inflows.

In addition to Synageva BioPharma, the issuers of two other Fund positions announced that they were being sold during the second quarter. Pall, a life science and industrial filtration company, gained 22% in the quarter following the news that it was being acquired by Danaher. Pall's stock was up 21% for the half year. Informatica, an enterprise data integration software company, was the third acquisition. Informatica's stock was up only 9% in the quarter, as much of the 25% year-to-date gain was realized earlier in the year when news broke that the company had hired an investment banker to contact potential buyers. We sold out of both positions following the announcements.

On the downside, several Fund consumer stocks declined in the second quarter. The Fresh Market, a specialty food retailer, was off over 20% for the quarter and the half year. While earnings were slightly above industry estimates, comparative quarterly sales data missed expectations. An unusually large number of competitive store openings have

hurt the company's overall sales, but we expect this trend to normalize. Fossil, a manufacturer of watches and jewelry, was down nearly 16% in the quarter and 14% for the half. A decline in North American sales of Fossil's Michael Kors line, and buzz around the Apple Watch and other wearable technology, negatively impacted returns. United Natural Foods, a distributor of natural/organic foods to grocery stores, was off 17% for the quarter and 18% for the half year as the specialty grocery industry experienced a general slowdown early in the year.

Other laggards included Solera Holdings, a developer of software for the automotive insurance claims processing industry, which fell 13% in the second quarter and ended the half year down 9%. With 60% of its sales outside of the United States, currency headwinds played a role in Solera's decline. Donaldson, an air filtration company, fell 5% in the quarter and was off over 6% for the half year. As mentioned last quarter, the company has suffered from weaker sales to its agriculture end market and has also been impacted by the strong U.S. dollar.

After several years of no take-out activity in the Fund, Columbia Acorn Select had three in the quarter and four so far in 2015. Acquisitions of Fund holdings have benefited the Fund historically, and typically confirm the investment merit of the business.

Our strategy remains unchanged. We continue to invest in growing businesses that trade at what we believe to be reasonable valuations relative to the quality and fundamentals of the business.

Matthew S. Szafranski was named co-portfolio manager of Columbia Acorn Select on May 1, 2015. As an analyst, Mr. Szafranski covers leisure, lodging, gaming, restaurants and consumer staples companies for our domestic team.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

Donaldson

   

5.0

%

 

LKQ

   

5.0

   

SEI Investments

   

4.6

   

The Fresh Market

   

3.6

   

Solera Holdings

   

2.6

   

Fossil

   

2.0

   

United Natural Foods

   

1.4

   

Ultragenyx Pharmaceutical

   

1.4

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.


12



COLUMBIA ACORN SELECTSM

AT A GLANCE

Total Net Assets of the Fund:
$604.7 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn SelectSM Class Z Shares

November 23, 1998 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (11/23/98 inception)    

3.16

%

   

6.07

%

   

7.25

%

   

13.01

%

   

7.98

%

   

10.35

%

 
Class A (10/16/00 inception)  

without sales charge

   

3.12

     

5.96

     

6.96

     

12.69

     

7.67

     

10.01

   

with sales charge

   

-2.82

     

-0.12

     

0.80

     

11.36

     

7.04

     

9.62

   

S&P MidCap 400® Index*

   

-1.06

     

4.20

     

6.40

     

17.82

     

9.74

     

10.55

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.84% for Class Z shares and 1.12% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   Ametek
Aerospace/Industrial Instruments
  6.4
%  
2.   Donaldson
Industrial Air Filtration
  5.0
%  
3.   LKQ
Alternative Auto Parts Distribution
  5.0
%  
4.   SEI Investments
Mutual Fund Administration & Investment
Management
  4.6
%  
5.   The Fresh Market
Specialty Food Retailer
  3.6
%  
6.   Vail Resorts
Ski Resort Operator & Developer
  3.2
%  
7.   Associated Banc-Corp
Midwest Bank
  3.1
%  
8.   Nordson
Dispensing Systems for Adhesives & Coatings
  3.0
%  
9.   Airgas
Industrial Gas Distributor
  2.9
%  
10.   Gentex
Manufacturer of Auto Parts
  2.8
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


13



COLUMBIA THERMOSTAT FUNDSM

IN A NUTSHELL

 

 
Charles P. McQuaid
Lead Portfolio Manager
  Christopher J. Olson
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

A "fund of funds" bears its allocable share of the costs and expenses of the underlying funds in which it invests. Such funds are thus subject to two levels of fees and potentially higher expense ratios than would be associated with a fund that invests and trades directly in financial instruments under the direction of a single manager.

The value of an investment in the Fund is based primarily on the performance of the underlying funds in which it invests. The Fund is subject to the risk that the investment manager's decisions regarding asset classes and underlying funds will not anticipate market trends successfully, resulting in a failure to preserve capital or lower total return. The Investment Manager may prefer an underlying fund in the Columbia Acorn Family of Funds over alternative investments. There can be no assurance that the Columbia Acorn Funds will outperform similar funds managed by the Investment Manager's affiliates. This is not an offer of the shares of any other mutual fund mentioned herein.

Our fund of funds, Columbia Thermostat Fund, saw its Class Z shares drop 0.26% in the second quarter of 2015. This compares to a 0.28% quarterly gain of the Fund's primary equity benchmark, the S&P 500® Index. The Fund's primary debt benchmark, the Barclays U.S. Aggregate Bond Index, fell 1.68% in the quarter, and the 50/50 Blended Benchmark was off 0.70% for the same period. For the half year, the Fund's 1.23% gain matched the S&P 500 Index, outpaced its Barclay's benchmark, which was off 0.10%, and topped the 0.66% gain of the 50/50 Blended Benchmark.

The weighted average gain for the Fund's equity portfolio was 1.02% for the second quarter, led by the performance of Columbia Acorn Select, up 3.19%. For the six months through June 30, the weighted average equity gain was 3.65%, led by the 8.35% gain of Columbia Select Large Cap Growth Fund. For both periods, five of seven of Thermostat's stock funds beat the S&P 500, and four beat their own benchmarks.

The bond portion of the Fund had a weighted average loss in the second quarter, falling 0.34%. Columbia Intermediate Bond Fund was the biggest detractor, falling 1.61% in the quarter. Year to date, the bond portfolio had a weighted average gain of 1.15%, due largely to the 2.69% gain of Columbia Income Opportunities Fund. During both periods, all four bond funds beat the Barclay's benchmark and beat or nearly matched their own benchmarks.

As mentioned last quarter, as a result of the periodic review called for by Columbia Thermostat's prospectus, we made several changes that went into effect May 1, 2015. On the equity side, we decreased the Fund's weighting in Columbia Acorn Fund and increased its weight in Columbia Contrarian Core Fund. On the bond side, we decreased exposure to Columbia Intermediate Bond Fund and increased the Fund's weight in Columbia U.S. Government Mortgage Fund. These changes are intended to bring the Fund closer to a market weight in larger cap stocks, and, on the bond side, modestly boost the yield of Thermostat's bond portfolio. We note that over the last several years, we've reduced the weighted average duration of Thermostat's bond portfolio, which should benefit shareholders if interest rates rise.

Also effective May 1, 2015, we revised the stock/bond allocation table. The Fund now moves to 10% stocks at an S&P 500 level over 2,225, up from 2,020. The Fund now moves to 90% stocks at a level of 1,100 or less, up from 970. In between, a 75 point move in the S&P 500 triggers a 5% point change in allocation of stock and bond funds. As a result of this revision, Thermostat increased its equity weight from 10% to 20% and cut its bond weight from 90% to 80% on May 1.

The Fund hit one reallocation trigger in the second quarter following the adoption of the new stock/bond allocation table, increasing stock exposure further, to 25%, and cutting its bond weight to 75% on June 30.

While Thermostat's return was slightly negative in the quarter and modestly positive for the half year, we are pleased with its

performance relative to its benchmarks. Thermostat matched the S&P 500 for the half year while having at most 25% in equities (and that only for the last day of the period) at a time when the bond index was off slightly. This is primarily due to good performance of the underlying funds, discussed above.

Results of the Funds Owned in Columbia Thermostat Fund

as of June 30, 2015

Stock Funds

Fund   Weightings
in category
  2nd
quarter
performance
  Year to date
performance
 
Columbia Acorn
International, Class I
   

20

%

   

0.81

%

   

5.23

%

 
Columbia Contrarian
Core Fund, Class I
   

20

%*

   

1.83

%

   

3.10

%

 
Columbia Dividend
Income Fund, Class I
   

20

%

   

-0.82

%

   

-1.15

%

 
Columbia Acorn Fund,
Class I
   

10

%*

   

2.53

%

   

6.63

%

 
Columbia Acorn Select,
Class I
   

10

%

   

3.19

%

   

6.19

%

 
Columbia Large Cap
Enhanced Core Fund,
Class I
   

10

%

   

-0.44

%

   

0.87

%

 
Columbia Select Large
Cap Growth Fund, Class I
   

10

%

   

2.48

%

   

8.35

%

 
Weighted Average
Equity Gain
   

100

%

   

1.02

%

   

3.65

%

 

Bond Funds

Fund   Weightings
in category
  2nd
quarter
performance
  Year to date
performance
 
Columbia Short Term
Bond Fund, Class I
   

40

%

   

0.15

%

   

0.73

%

 
Columbia Intermediate
Bond Fund, Class I
   

20

%*

   

-1.61

%

   

0.29

%

 
Columbia Income
Opportunities Fund, Class I
   

20

%

   

-0.22

%

   

2.69

%

 
Columbia U.S. Government
Mortgage Fund, Class I
   

20

%*

   

0.04

%

   

1.32

%

 
Weighted Average
Income Gain/Loss
   

100

%

   

-0.34

%

   

1.15

%

 

*  Change effective with the May 1, 2015 prospectus. Weighted average returns through the end of the period reflect linked returns between the previous fund weightings and the current weights in these positions.

Columbia Thermostat Fund Rebalancing in the Second Quarter

May 1, 2015

 

20% stocks, 80% bonds

 

June 30, 2015

 

25% stocks, 75% bonds

 

The Fund's investments in the underlying funds may present certain risks, including the following. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The Fund's investment in other funds subjects it to the investment performance (positive or negative), risks and expenses of these underlying funds. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than in investments in larger, more established companies. There are risks associated with fixed income investments, including credit risk, market risk, interest rate risk and prepayment and extension risk. In general, bond prices fall when interest rates rise and vice versa. This effect is more pronounced for longer term securities. Non-investment-grade (high-yield or junk) securities present greater price volatility and more risk to principal and income than higher rated securities. Foreign investments subject the Fund to political, economic, market, social and other risks within a particular country, as well as to potential currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers.


14



COLUMBIA THERMOSTAT FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$1.1 billion

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Thermostat FundSM Class Z Shares

September 25, 2002 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

    2nd
quarter
  Year to
date
 

1 year

 

5 years

 

10 years

  Life of
Fund
 
Class Z (9/25/02 inception)    

-0.26

%

   

1.23

%

   

2.69

%

   

10.78

%

   

6.53

%

   

7.77

%

 
Class A (3/3/03 inception)  

without sales charge

   

-0.33

     

1.08

     

2.46

     

10.51

     

6.26

     

7.50

   

with sales charge

   

-6.06

     

-4.75

     

-3.43

     

9.22

     

5.63

     

7.00

   

S&P 500® Index*

   

0.28

     

1.23

     

7.42

     

17.34

     

7.89

     

9.72

   
Barclays U.S. Aggregate
Bond Index*
   

-1.68

     

-0.10

     

1.86

     

3.35

     

4.44

     

4.48

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmarks. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 0.77% for Class Z shares and 1.02% for Class A shares. The returns shown for periods prior to the inception of the Fund's Class A shares append the returns of the Fund's Class Z shares, the Fund's oldest share class. These returns are adjusted to reflect any higher class-related operating expenses of the newer share classes, as applicable. Please visit columbiathreadneedleus.com/investment-products/mutual-funds/appended-performance for more information.

Asset Allocation

as a percentage of net assets, as of 6/30/15

Portfolio Weightings

as a percentage of assets in each investment category, as of 6/30/15

Stock Mutual Funds

Columbia Acorn International, Class I

   

20

%  

Columbia Contrarian Core Fund, Class I

   

20

%*  

Columbia Dividend Income Fund, Class I

   

20

%  

Columbia Acorn Fund, Class I

   

10

%*  

Columbia Acorn Select, Class I

   

10

%  
Columbia Large Cap Enhanced Core Fund,
Class I
   

10

%  
Columbia Select Large Cap Growth Fund,
Class I
   

10

%  

Bond Mutual Funds

Columbia Short Term Bond Fund, Class I

   

40

%  

Columbia Intermediate Bond Fund, Class I

   

20

%*  
Columbia Income Opportunities Fund,
Class I
   

20

%  
Columbia U.S. Government Mortgage Fund,
Class I
   

20

%*  

*Change effective with the May 1, 2015 prospectus. Weighted average returns through the end of the period reflect linked returns between the previous fund weightings and the current weights in these positions.


15



COLUMBIA ACORN EMERGING MARKETS FUNDSM

IN A NUTSHELL

 

 
Fritz Kaegi
Co-Portfolio Manager
  Stephen Kusmierczak
Co-Portfolio Manager
 

 

 
Louis J. Mendes
Co-Portfolio Manager
  Satoshi Matsunaga
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging and frontier market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Please also see "A Comment on Trading Volumes" on Page 1 of this report.

Columbia Acorn Emerging Markets Fund Class Z shares lost 2.06% in the second quarter of 2015, underperforming the 1.17% gain of the Fund's primary benchmark, the S&P Emerging Markets Between $500M and $5B® Index. For the first six months of the year, the Fund was down 2.83%, trailing the benchmark's gain of 3.05% by 588 basis points.* Since its inception in August 2011, the Fund has returned an annualized gain of 6.40% compared to the benchmark's 3.68% return, or 272 basis points of outperformance on an annualized basis. The Fund lagged the benchmark in the first half of the year primarily due to the underperformance of Fund stocks with exposure to Southeast Asia and China.

During the quarter and half year, the Fund's main overweight positions underperformed. Southeast Asia, where the Fund had a 21% weight that was seven percentage points over the benchmark, was the worst performing region in the benchmark during the quarter. For most of its existence, Columbia Acorn Emerging Markets Fund has been significantly underweight in China, which was the best performing market in the benchmark in the first half of the year. By the end of June, however, we added about 12 percentage points to the Fund's exposure, as Chinese authorities began to implement market-based policy reforms in certain sectors including environmental protection and health care. While we were skeptical of the high valuations of many China-related stocks, we made several new investments within these sectors at what we believe are reasonable prices. This brought the Fund's exposure to China to slightly over the benchmark weight. Concurrently, many Southeast Asian stocks, which are generally illiquid, were impacted by slower economic growth and tighter liquidity in the region.

The Fund's largest contributor to returns during the second quarter was Chinese tobacco packaging supplier AMVIG Holdings. Its stock gained 15% in the second quarter and was up 31% for the half year, benefiting from the overall Chinese market rally. PChome Online, the only listed e-commerce company in Taiwan, was up 28% in the second quarter and 55% for the half year, as it continued to see strong revenue growth due to Taiwanese consumers' switch to online retail channels. A retail bank and insurer in Kazakhstan, Halyk Savings Bank of Kazakhstan, was up 24% in the quarter as it doubled its dividend and fears about further depreciation of the tenge, Kazakhstan's currency, subsided somewhat. Year to date its stock was up 8%.

The largest percentage decline in the quarter and half year period was Melco Crown (Philippines) Resorts, an operator of an integrated casino resort in the Philippines. Despite a successful grand opening in February, the stock fell 45% in

the quarter and was off 63% for the half year, as market participants seem to fear that negative gaming revenue trends in Macau will spread over Asian casinos. Its stock decline was much sharper than its affiliate Melco International, a Macau casino operator, which declined 36% for the half year and 16% in the second quarter. RFM, the dominant pasta and ice cream manufacturer in the Philippines, was off 22% in the second quarter despite solid first quarter earnings. Its removal from a major index at the end of May seemed to trigger a large sell-off of this small-cap stock. Year to date, RFM was off 17%. Coronation Fund Managers, the leading asset manager in South Africa, fell 14% in the second quarter and declined 30% for the half year due to significantly lower performance fees compared to those earned last year.

Responding to tighter liquidity in local markets, we have been reducing the Fund's overweight in Southeast Asia and, as mentioned, increasing its exposure to China. The stocks we have added with Chinese exposure have unique themes supported by structural tailwinds. We believe that waste treatment companies China Everbright Water and SIIC Environment, for example, should benefit from increased attention in China to environmental issues. Both companies operate in China but are listed in Singapore. We believe that our focus on higher quality businesses that are poised to benefit from positive long-term trends should provide investors with above average risk-adjusted returns.

Satoshi Matsunaga was named co-portfolio manager of Columbia Acorn Emerging Markets Fund, effective May 1, 2015. Mr. Matsunaga has 11 years of industry experience and covers Southeast Asian companies as an analyst. Also effective May 1, P. Zachary Egan is no longer a co-portfolio manager of the Fund.

*A basis point is 1/100 of a percent.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

AMVIG Holdings

   

3.1

%

 

Coronation Fund Managers

   

2.9

   

Halyk Savings Bank of Kazakhstan - GDR

   

2.6

   

PChome Online

   

1.7

   

SIIC Environment

   

1.5

   

RFM

   

1.2

   

Melco Crown (Philippines) Resorts

   

1.0

   

China Everbright Water

   

0.9

   

Melco International

   

0.9

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.

Columbia Acorn Emerging Markets Fund is closed to most new investors and new accounts with certain exceptions. Refer to the Fund's prospectus for details.


16



COLUMBIA ACORN EMERGING MARKETS FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$416.8 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn Emerging Markets FundSM Class Z Shares

August 19, 2011 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

 

2nd quarter

 

Year to date

 

1 year

 

Life of Fund

 
Class Z (8/19/11 inception)    

-2.06

%

   

-2.83

%

   

-9.85

%

   

6.40

%

 
Class A (8/19/11 inception)                  

without sales charge

   

-2.14

     

-2.99

     

-10.09

     

6.10

   

with sales charge

   

-7.77

     

-8.59

     

-15.25

     

4.49

   
S&P Emerging Markets Between
$500M and $5B® Index*
   

1.17

     

3.05

     

-2.71

     

3.68

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.33% for Class Z shares and 1.57% for Class A shares.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.   Zee Entertainment Enterprises (India)
Indian Programmer of Pay Television Content
  3.4
%  
2.   AMVIG Holdings (China)
Chinese Tobacco Packaging Material Supplier
  3.1
%  
3.   Coronation Fund Managers (South Africa)
South African Fund Manager
  2.9
%  
4.   Halyk Savings Bank of
Kazakhstan–GDR (Kazakhstan)
Retail Bank & Insurer in Kazakhstan
  2.6
%  
5.   Koh Young Technology (Korea)
Inspection Systems for Printed Circuit Boards
  2.1
%  
6.   Adani Ports & Special Economic
Zone (India)
Indian West Coast Shipping Port
  2.0
%  
7.   Rand Merchant Insurance (South Africa)
Directly Sold Property & Casualty Insurance;
Holdings in other Insurers
  1.9
%  
8.   CAR Inc (China)
Consolidator of Chinese Auto Rental Sector
  1.9
%  
9.   Cable and Wireless (United Kingdom)
Telecommunications Service Provider in the
Caribbean
  1.8
%  
10.   PChome Online (Taiwan)
Taiwanese Internet Retail Company
  1.7
%  

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


17



COLUMBIA ACORN EUROPEAN FUNDSM

IN A NUTSHELL

 

 
Andreas Waldburg-Wolfegg
Co-Portfolio Manager
  Stephen
Kusmierczak
Co-Portfolio Manager
 

Performance data shown represents past performance and is not a guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data shown. Please visit columbiathreadneedle.com/us for daily and most recent month-end performance updates.

Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different, potentially less stringent, financial and accounting standards than those generally applicable to U.S. issuers. Risks are enhanced for emerging market issuers. Investments in small- and mid-cap companies involve risks and volatility and possible illiquidity greater than investments in larger, more established companies. Please also see "A Comment on Trading Volumes" on Page 1 of this report.

Columbia Acorn European Fund Class Z shares gained 2.30% in the second quarter of 2015, underperforming by 273 basis points* the 5.03% gain of its primary benchmark, the S&P Europe Between $500M and $5B Index. Year to date, the Fund was up 6.80% and trailed the benchmark return of 10.62% by 382 basis points. Since inception, the Fund has delivered an absolute return of 12.61% on an annualized basis, but lagged the benchmark return of 14.88%.

The Fund's largest contributor to performance both in the quarter and for the half year was Cambian, a provider of mental health rehabilitation to adults and children in the United Kingdom. Cambian has demonstrated better outcomes at lower costs based on data-driven protocols, and is a key beneficiary of a government outsourcing effort. The stock gained 37% in the second quarter and was up 50% for the half year. French transport and logistics company Norbert Dentressangle was the next largest contributor in the quarter and half. Its 43% second quarter jump followed a takeout offer and helped drive a 64% year-to-date gain. We sold this long-term holding on the announcement. Ocado, an online grocer in the United Kingdom, gained 35% in the quarter, as the company announced its intention to sign another contract with a traditional grocer for the delivery of its state-of-the-art online grocery system. We believe the company should be a long-term winner as more traditional grocery retail goes online with its better, fresher grocery assortment and lower capital requirements. Year to date, Ocado gained 13%. Denmark's SimCorp, a developer of software for investment managers, saw a continued recovery in new license wins as asset managers responded to new compliance rules introduced following the financial crisis. The stock gained 55% in the half, making it the third largest performance contributor for that period, and gained 23% in the second quarter.

The Fund underperformed in three of its four European regions in the second quarter, with the leading detractors being the Nordic region and Northern and Central Europe. The Mediterranean was the only outperforming region for the Fund, yet also contained the Fund's largest performance detractor, French postage meter equipment company Neopost. Revenues for Neopost have been depressed by weak European demand, while profits from faster-growing new businesses have not offset declines in its core equipment business. Neopost's stock declined over 20% in the quarter and the first half, making it the Fund's biggest detractor for both periods. The second biggest underperformer for both the quarter and half year was UK-based industrial lighting company Dialight. The company announced the departure of its CEO, followed by a profit warning, sending its stock down 28% in the quarter and 35% for the half. The Fund's next two large detractors

were from Scandinavia. Munksjo, a Finnish specialty paper maker, declined 14% on little news after reaching a record high at the end of the first quarter. For the half year, its stock was up slightly over 1%. Atea, the largest IT hardware and software reseller and integrator in the Nordic region, dropped 17% in the quarter after the company disclosed that Danish salespeople bribed a regional government official. We believe that the problem is not representative of wider company culture and that reputational damage will be limited. Subsequently, we took advantage of the decline to add to the position. Year to date, Atea was down 10%.

The Fund's underperformance for the half-year period was caused by weak stock picking and was not the result of poor sectoral or geographic positioning versus the benchmark. As bottom-up stock pickers, we do not steer the Fund toward sectors or regions. Our bottom-up approach did, however, result in the Fund having an overweight position in consumer discretionary stocks, which was among the best performing major sectors in the benchmark over the six months. Yet the Fund's gain of 13% in this sector fell short of the benchmark return of 14%. In eight of the 10 industry sectors, stock selection cost the Fund some performance relative to the benchmark during the first half.

*A basis point is 1/100 of a percent.

Fund's Positions in Mentioned Holdings

As a percentage of net assets, as of 6/30/15

Munksjo

   

3.6

%

 

Neopost

   

2.1

   

SimCorp

   

1.8

   

Cambian

   

1.7

   

Ocado

   

1.2

   

Dialight

   

1.0

   

Atea

   

1.0

   

Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. Top holdings exclude short-term holdings and cash, if applicable.

The Fund holds shares traded on both the Finnish and Swedish exchanges.


18



COLUMBIA ACORN EUROPEAN FUNDSM

AT A GLANCE

Total Net Assets of the Fund:
$56.4 million

Performance data shown below represents past performance, does not guarantee future results, assumes reinvestment of dividends and distributions and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data shown. Performance data reflects fee waivers or reimbursements of Fund expenses, if any; in their absence, performance results would have been lower. Indexes are unmanaged; their results do not reflect the effect of expenses or sales charges. Securities in the Fund may not match those in an index. Please visit columbiathreadneedle.com/us for performance data current to the most recent month-end.

The Growth of a $10,000 Investment in Columbia Acorn European FundSM Class Z Shares

August 19, 2011 (Fund inception) through June 30, 2015

This chart shows the change in value of a hypothetical $10,000 investment in Class Z shares of the Fund during the stated time period.

Average Annual Total Returns for period ended June 30, 2015

 

2nd quarter

 

Year to date

 

1 year

 

Life of Fund

 
Class Z (8/19/11 inception)    

2.30

%

   

6.80

%

   

-3.58

%

   

12.61

%

 
Class A (8/19/11 inception)  

without sales charge

   

2.24

     

6.66

     

-3.84

     

12.32

   

with sales charge

   

-3.62

     

0.56

     

-9.35

     

10.61

   
S&P Europe Between $500M and
$5B® Index*
   

5.03

     

10.62

     

-1.86

     

14.88

   

Results for other share classes can be found on Page 2.

*The Fund's primary benchmark. Please see Page 126 for index descriptions.

Returns for Class A shown with and without the maximum initial sales charge of 5.75%. As stated in the May 1, 2015, prospectus, the Fund's annual operating expense ratio is 1.50% for Class Z shares and 1.75% for Class A shares.

Portfolio Diversification

as a percentage of net assets, as of 6/30/15

Top 10 Holdings

as a percentage of net assets, as of 6/30/15

1.

  Munksjo (Finland)†
Specialty Paper Maker
  3.6
%  
2.   Assura (United Kingdom)
UK Primary Health Care Property Developer
  2.8
%  
3.   Distribuidora Internacional
de Alimentación (Spain)
Discount Retailer in Spain & Latin America
  2.7
%  
4.   Partners Group (Switzerland)
Private Markets Asset Management
  2.4
%  
5.   Charles Taylor (United Kingdom)
Insurance Services
  2.4
%  
6.   Spirax Sarco (United Kingdom)
Steam Systems for Manufacturing &
Process Industries
  2.3
%  
7.   Neopost (France)
Postage Meter Machines
  2.1
%  
8.   Aurelius (Germany)
European Turnaround Investor
  2.1
%  
9.   Cable and Wireless (United Kingdom)
Telecommunications Service Provider in the
Caribbean
  1.9
%  
10.   William Demant Holding (Denmark)
Manufacture & Distribution of Hearing Aids &
Diagnostic Equipment
  1.9
%  

†The Fund holds shares traded on both the Finnish and Swedish exchanges.

The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings.


19



SQUIRREL CHATTER: BATTERY TECHNOLOGY AND ITS IMPLICATIONS

Battery History

Alessandro Volta was a professor of physics at the University of Pavia in Italy at a time of great debate about electricity. He was also a skilled maker of scientific instruments, including machines that could generate an electrostatic charge. After reading a paper noting a torpedo fish could create electric shocks, and proposing that the process creating the charge could be imitated, Volta created the undisputed first battery.1 As described in a paper he wrote in March 1800, the battery consisted of a column of zinc and copper discs separated by brine-soaked cardboard.2

Within months, others were making variations of Volta's battery and improved versions were developed. The batteries were largely used in laboratory equipment, often to enable electrolysis, which resulted in scientific discoveries such as the separation of water into oxygen and hydrogen, as well as discoveries of other elements including sodium and magnesium.3 For several decades, electroplating of metal appears to have been the primary commercial use of batteries.4

All batteries have anode and cathode electrodes as well as an acid or alkaline electrolyte, which facilitates movement of electricity between the electrodes. Components in existing batteries have been refined over time and often later replaced by new materials. In 1839, Sir William Robert Grove, a Welsh judge and physical scientist, made a version utilizing zinc in sulfuric acid and platinum in nitric acid, which produced a then-powerful charge of 1.8 volts but emitted poisonous nitric oxide gas. In the 1850s, German chemist Robert Bunsen created a much cheaper version of Grove's battery by substituting carbon for platinum.5

Telegraphs were developed in the 1830s and 1840s, and became widespread after inventor Samuel Morse's 1844 Washington, D.C. to Baltimore link. That initial line used huge Grove batteries at both ends plus 150-pound Grove batteries at relay points in between. Within 30 years there were 650,000 land miles of telegraph cable6 and, since telegraphs then needed battery

powered relays every few miles to boost their signals, commercial demand for batteries boomed. Telegraph office batteries initially needed regular care on strict schedules. The electrodes had to be cleaned or replaced, and the electrolyte needed replenishing.7

The first practical rechargeable battery was developed in 18598 by French physicist Gaston Planté using lead because it was readily available, cheap and amenable to recharging.9 The next battery breakthrough came in 1866 when French engineer Georges Leclanché created a simple, cheap battery consisting of a glass jar with manganese dioxide and zinc electrodes, a small bar of carbon, and an ammonium chloride electrolyte, which was then a common household chemical (sal ammoniac) used in cleaning and baking. This was the first battery not to use acid and, when discharged, replacing the sal ammoniac would revitalize it. Millions were produced for telegraphs, doorbells and telephones, though the battery was good only for intermittent use.10

German chemist Carl Gassner in 1887 patented his "dry cell" battery, consisting of a zinc can as the anode, ammonium chloride and plaster of paris as a dry electrolyte and carbon as the cathode. Producing a steady 1.5 volts, this was apparently the first battery requiring no maintenance. This compact six-inch long battery was durable and was mass-produced to power alarm clocks and bicycle lights.11

Batteries powered many of the first cars. The 1894 Electrobat had 1,500 pounds of lead-acid batteries.12 Of the 4,200 automobiles sold in the United States in the year 1900, battery powered cars were the most popular, followed by steam powered cars. Fewer than 1,000 were powered by gasoline.13

American inventor and businessman Thomas Edison was a proponent of battery-powered cars, and was determined to create a new rechargeable battery with triple the capacity of the lead-acid battery.14 His team experimented with hundreds of different compounds for a better automotive battery. When chided about failed experiments, he said, "No, I didn't fail. I discovered 24,999 ways that the storage battery does not work."15 Ultimately


20



he developed a battery with nickel and iron electrodes and a potassium-based electrolyte that outperformed existing lead-acid batteries by 233%.16 But it was expensive and gasoline-powered cars dominated once the automatic starter (as opposed to a crank) became ubiquitous.

In the 1950s, inventor Samuel Ruben created the alkaline manganese battery in a new AAA size, and licensed it to Mallory, which later became Duracell. That battery was popular in Kodak flash cameras. Canadian-American chemist Lewis Urry of Eveready invented the modern alkaline battery in 1959.17 His primary innovation was to use powdered zinc, which has dramatically more surface area than solid zinc. Labelled the Energizer, it had 40 times the capacity of the then-ubiquitous zinc-carbon battery.18

As power-hungry portable electronics took off after 1980, the quest for high energy, rechargeable batteries intensified. Nickel-cadmium batteries were invented, but had a "memory effect," which reduced capacity if recharged before depletion, and contained toxic cadmium. Nickel-metal-hydride batteries were also developed, powering cell phones and the first hybrid cars. These batteries had high capacity for the time, but tended to self-discharge when not in use.

Lithium Batteries

Chemists were long aware of lithium's potential in batteries. Lithium is the lightest metal, has half the density of water and, pound per pound, a lithium battery should be able to produce 30 times the energy of a lead-acid battery. However, lithium is too volatile to exist by itself in nature. It will burn or explode when exposed to air and pure lithium must be stored in oil to prevent it from reacting.

Exxon had a venture capital division that recruited British chemist Stanley Whittingham in the 1970s to pursue development of lithium batteries. Whittingham created a coin-sized battery with a lithium-aluminum alloy and a sulfide electrode. The first rechargeable lithium battery was used in a solar-powered watch shipped in 1977. But larger batteries ignited in Exxon's laboratories, and Exxon later exited the business and sold its patents.19

John Goodenough achieved the breakthrough in lithium batteries. A University of Chicago Ph.D. working at Oxford, he experimented with metal oxides, which could be charged and discharged at higher voltages than sulfides.

He also realized that as lithium ions migrate from a sulfide-based cathode, sections of the cathode tend to hollow out and collapse, reducing the ability of the battery to be recharged. Metal oxides in the cathode, in effect, reinforce its structure.

In 1980, Goodenough's team announced the lithium-cobalt-oxide battery.20 His belief in oxides proved correct, as the battery produced about 4 volts versus the 2.4 volts Whittingham achieved.21 "It was the first lithium-ion cathode with the capacity to power both compact and relatively large devices...far superior to anything on the market," said author Steve Levine in his recently published book, The Powerhouse.22 Yet because the battery was unusual, no companies in Europe or the Americas licensed it.

South African Ph.D. Mike Thackeray joined Goodenough during a stint at Oxford and helped invent a nickel-manganese-cobalt (NMC) cathode in place of Goodenough's lithium-cobalt-oxide. The NMC version has less safety risk than Goodenough's first lithium battery and theoretically should provide more energy.23 A version of this battery is used in the Chevrolet Volt.

Battery research funding diminished in the United States during the 1980s, a period of low oil prices and excitement about superconductivity. In Japan, however, battery research continued in earnest. After a decade of work, Japanese researcher Akira Yoshino combined Goodenough's lithium-cobalt-oxide cathode with a carbon anode and, in 1991, Sony shipped a resulting lithium-ion battery for small electronic devices. Later, Sony changed the anode to graphite, which was benign and better absorbed lithium ions, resulting in more power for longer periods. The Sony batteries were wildly successful, spurring knockoffs as well as additional lithium battery research.24

Electric Cars and Other Uses for Batteries

Improving performance and dropping costs have enabled much more sophisticated portable electronics but the biggest potential market for batteries is in automobiles. Thomas Edison said that the internal combustion engine would be a bridge between generations of battery powered cars, and he yet could be proven right (albeit late).25

The basic physics problem confronting battery powered vehicles is the energy density of gasoline versus batteries. A kilogram of gasoline contains about


21



12,700 watt hours of energy,26 while lithium batteries currently used in automobiles have energy densities ranging from 155 to 233 watt hours per kilogram.27 However, electric motors are over 90% efficient, three times that of gasoline engines,28 and electric vehicles can recapture up to half of energy expended through regenerative breaking,29 reducing the effective energy density gap somewhat.

Another key use for improved batteries is within the electric grid. Renewable power from solar and wind is by nature intermittent, and higher capacity, lower cost batteries will allow the adoption of more renewable energy. As battery performance improves and costs fall, expect to see more electric automobiles and renewable energy.

Potential Breakthroughs

In his book, Levine describes the inventions of various forms of lithium batteries and Argonne National Laboratory's successful effort to win funding as The Joint Center for Energy Storage Research. Argonne's goal is another battery breakthrough, achieving five times the performance at one-fifth the cost in five years. The Joint Center is looking beyond lithium. Argonne's senior scientist George Crabtree notes that new concepts, such as use of materials with double ions, use of reactions on the electrode surface instead of inside them and liquid electrodes, are worth exploring.

Investment Implications

Predicting which battery technology will succeed and which battery companies will profit is extremely difficult and risky. I've been on numerous battery technology wild goose chases, and can vaguely recall talking to Argonne researchers back in the late 1970s. The Columbia Acorn Funds' shareholders have instead benefitted from investing downstream, in companies that prospered from improved battery technology. For example, domestic funds had profitable investments in cell phone service providers as the industry consolidated years ago, and more recently in cell tower companies.

Charles P. McQuaid

Portfolio Manager, Analyst and Advisor
Columbia Wanger Asset Management, LLC

The information and data provided in this analysis are derived from sources that we deem to be reliable and accurate. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. The views/opinions expressed here are those of the author and not of the Columbia Acorn Trust Board, are subject to change at any time based upon economic, market or other conditions, may differ from views expressed by other Columbia Management associates and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia Acorn Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Acorn Fund.

1  In 1936, archeologist Wilhelm Koenig found a five by three inch broken clay jar in Eastern Iraq that held a rolled sheet of copper and an iron rod. It dated back to between 200 BC and 200 AD. Koenig realized that with an acid or alkaline liquid, the device would be a functioning battery. Several similar jars have since been found. Google "Baghdad battery" to pursue the mystery and controversy.

2  Seth Fletcher, Bottled Lightning: Superbatteries, Electric Cars, and the New Lithium Economy (New York, Hill and Wang, 2011), p. 11.

3  Henry Schlesinger, The Battery: How Portable Power Sparked a Technological Revolution (New York, HarperCollins, 2010), p. 77.

4  Ibid., p. 50, 65.

5  Ibid., p. 96.

6  Ibid., p. 110, 130.

7  Ibid., p. 139.

8  Fletcher, op. cit., p. 13.

9  Schlesinger, op. cit., p. 145.

10  Ibid., p. 142-143.

11  Ibid., p. 179.

12  Ibid., p. 174.

13  Jim Motavalli, High Voltage: The Fast Track To Plug In the Auto Industry (New York, Rodale, 2011), p. xii.

14  Fletcher, op. cit., p. 14.

15  Schlesinger, op. cit., p. 174.

16  Fletcher, op. cit., 15.

17  NNDB website: nndb.com/people/004/000206383. Accessed April 2, 2015.

18  Schlesinger, op. cit., p. 250.

19  Steve Levine, The Powerhouse: Inside the Invention of a Battery to Save the World (New York, Viking, 2015), p. 21.

20  Ibid., p. 25.

21  Fletcher, op. cit., p. 44.

22  Levine, op. cit., p. 25.

23  Ibid., p. 41-44.

24  Ibid., p. 35.

25  Schlesinger, op. cit., p. 174.

26  Hypertextbook website: hypertextbook.com/facts/2003/ArthurGolnik.shtml. Accessed April 1, 2015.

27  Luke Ottaway, "What Makes Tesla's Batteries So Great?" Torque News, October 19, 2014, on website at: torquenews.com/2250/what-makes-tesla-s-batteries-so-great. Accessed April 3, 2015.

28  Tobias Fleiter and Wolfgang Eichhammer, "Energy efficiency in electric motor systems: Technology, saving potentials and policy options for developing countries," Working Paper 11/2011, p. 5, published by United Nations Industrial Development Organization, unido.org. Accessed April 21, 2015.

29  Source: ProEv Inc. article titled, "Regenerative Braking Efficiency," 2015.


22



COLUMBIA ACORN FAMILY OF FUNDS

2015 MID-YEAR DISTRIBUTIONS

The following table lists the mid-year distributions for the Columbia Acorn Family of Funds. The record date was June 2, 2015,

and the ex-dividend and payable date was June 3, 2015. Columbia Acorn Emerging Markets Fund did not have any distributions.

Fund

  Short-term
Capital
Gain
  Long-term
Capital
Gain
  Ordinary
Income
  Reinvestment
Price
 

Columbia Acorn® Fund

 

Class A

   

None

   

$

1.64099

     

None

   

$

30.97

   

Class B

   

None

   

$

1.64099

     

None

   

$

26.82

   

Class C

   

None

   

$

1.64099

     

None

   

$

26.17

   

Class I

   

None

   

$

1.64099

     

None

   

$

32.88

   

Class R4

   

None

   

$

1.64099

     

None

   

$

33.39

   

Class R5

   

None

   

$

1.64099

     

None

   

$

33.43

   

Class Y

   

None

   

$

1.64099

     

None

   

$

33.51

   

Class Z

   

None

   

$

1.64099

     

None

   

$

32.79

   

Columbia Acorn International®

 

Class A

   

None

   

$

0.38368

     

None

   

$

44.63

   

Class B

   

None

   

$

0.38368

     

None

   

$

43.07

   

Class C

   

None

   

$

0.38368

     

None

   

$

42.89

   

Class I

   

None

   

$

0.38368

     

None

   

$

44.79

   

Class R

   

None

   

$

0.38368

     

None

   

$

44.55

   

Class R4

   

None

   

$

0.38368

     

None

   

$

45.03

   

Class R5

   

None

   

$

0.38368

     

None

   

$

44.72

   

Class Y

   

None

   

$

0.38368

     

None

   

$

45.07

   

Class Z

   

None

   

$

0.38368

     

None

   

$

44.73

   

Columbia Acorn USA®

 

Class A

   

None

   

$

0.84005

     

None

   

$

30.74

   

Class B

   

None

   

$

0.84005

     

None

   

$

26.41

   

Class C

   

None

   

$

0.84005

     

None

   

$

26.16

   

Class I

   

None

   

$

0.84005

     

None

   

$

33.03

   

Class R4

   

None

   

$

0.84005

     

None

   

$

33.57

   

Class R5

   

None

   

$

0.84005

     

None

   

$

33.60

   

Class Y

   

None

   

$

0.84005

     

None

   

$

33.69

   

Class Z

   

None

   

$

0.84005

     

None

   

$

32.84

   

        


23



COLUMBIA ACORN FAMILY OF FUNDS

2015 MID-YEAR DISTRIBUTIONS, CONTINUED

Fund

  Short-term
Capital
Gain
  Long-term
Capital
Gain
  Ordinary
Income
  Reinvestment
Price
 

Columbia Acorn International SelectSM

 

Class A

   

None

     

None

   

$

0.09778

   

$

23.31

   

Class B

   

None

     

None

   

$

0.01466

   

$

21.90

   

Class C

   

None

     

None

   

$

0.00000

   

$

21.75

   

Class I

   

None

     

None

   

$

0.09778

   

$

23.61

   

Class R4

   

None

     

None

   

$

0.09778

   

$

23.78

   

Class R5

   

None

     

None

   

$

0.09778

   

$

23.76

   

Class Y

   

None

     

None

   

$

0.09778

   

$

23.75

   

Class Z

   

None

     

None

   

$

0.09778

   

$

23.61

   

Columbia Acorn SelectSM

 

Class A

   

None

   

$

1.77870

     

None

   

$

20.70

   

Class B

   

None

   

$

1.77870

     

None

   

$

17.42

   

Class C

   

None

   

$

1.77870

     

None

   

$

17.07

   

Class I

   

None

   

$

1.77870

     

None

   

$

22.18

   

Class R4

   

None

   

$

1.77870

     

None

   

$

22.56

   

Class R5

   

None

   

$

1.77870

     

None

   

$

22.60

   

Class Y

   

None

   

$

1.77870

     

None

   

$

22.69

   

Class Z

   

None

   

$

1.77870

     

None

   

$

22.06

   

Columbia Thermostat FundSM

 

Class A

 

$

0.11593

   

$

0.16409

   

$

0.02233

   

$

14.80

   

Class B

 

$

0.11593

   

$

0.16409

   

$

0.02233

   

$

14.88

   

Class C

 

$

0.11593

   

$

0.16409

   

$

0.02233

   

$

14.86

   

Class R4

 

$

0.11593

   

$

0.16409

   

$

0.02233

   

$

14.69